Can Your Force Majeure Clause Weather Today’s Storms?

Most garden-variety force majeure clauses specify that both parties to a contract can cancel without invoking damages if unanticipated occurrences outside the control of either party make it illegal or impossible to go forward with the event. But that’s not enough in today’s environment, says attorney Joshua Grimes, president of Grimes Law Offices LLC. With today’s 24/7 news cycle and a growing national obsession with the Weather Channel, more attendees are getting spooked by potential events—anything from a hurricane bearing down on Houston to a service workers strike that threatens to shut down an airport—and deciding to skip the meeting several days ahead of time.

In other words, he said, sometimes you need to have an out before a raindrop falls or the protest signs are hoisted. Even though it’s not clear if the storm or strike will actually make your meeting impossible or impractical to hold, your attendees have already decided it’s a no-go.

Grimes suggests that meeting professionals negotiate to include verbiage that would make it possible to invoke force majeure several days before the event is scheduled to begin. He recommends including “impracticable” and “inadvisable” to the standard “illegal” and “impossible” when it comes to reasons covered under the force majeure clause to cancel without damages ahead of the event.

Of course, as he readily admits, “Hoteliers and other suppliers legitimately hate words like ‘inadvisable’ because they’re too indefinite.” So define it. “Say that, in order to declare a cancellation because it’s inadvisable to go forward with the meeting, the group has to show evidence that 30 percent or 40 percent—whatever percentage you agree upon—of anticipated attendees have cancelled their attendance.”

Neither groups nor vendors want to worry about whether or not they can cancel without getting dunned with cancellation fees, he says. “It should be clear in the contract that anticipation of a bad situation would allow you to cancel, as long as you have a clear definition of what “inadvisable” or “impracticable” means. You can’t just say, “a significant number of attendees.”

For groups that want to forge ahead with a meeting even as a hurricane or strike appears to be headed to their host city, Grimes says another alternative is to include in the contract that, under force majeure circumstances, the hotel will waive food and beverage minimums and attrition damages. “That way, if you have a brave group that wants to go anyway, they have an option to keep going without losing incredible amounts of money.”